What is Strike (STRK)?

TLDR Strike (STRK) is a decentralized lending protocol built on Ethereum that enables users to earn interest on crypto deposits or borrow assets using overcollateralized positions, governed entirely by its community.

1. Decentralized Money Market – Users supply crypto to earn variable interest via sTokens, while borrowers access loans using collateral.
2. Community-Governed – STRK token holders vote on protocol upgrades, asset listings, and parameters through elected Governors.
3. Scalable Architecture – Designed to streamline adding new collateral types while maintaining security via delegated governance.

Deep Dive

1. Core Functionality

Strike operates as a non-custodial money market where users deposit assets like ETH or stablecoins to mint interest-bearing sTokens (e.g., sETH). These tokens accrue value as interest compounds, redeemable 1:1 for the underlying asset. Borrowers post collateral (50–80% LTV ratios) and pay algorithmically determined rates based on supply/demand. Rates follow a yield curve model: higher utilization increases borrowing costs and supplier rewards.

2. Governance Structure

The protocol is governed by STRK holders who delegate voting power to 21 Governors elected every 28 days. Governors whitelist assets for proposals, which require 65,000 STRK to submit and 130,000 STRK to pass. Key decisions include adjusting collateral factors, reserve allocations, and integrating new assets. STRK’s fixed max supply (6.54M tokens) ensures no inflation, with ~3.5M distributed via liquidity mining over eight years.

3. Technical Differentiation

Strike forked Compound’s codebase but introduced lower governance barriers. For example, Compound requires $15M in tokens to propose new assets, while Strike’s Governor system allows community-nominated assets with lighter capital requirements. It also emphasizes decentralization from launch, with 45% of STRK circulating initially versus Compound’s gradual distribution.

Conclusion

Strike is a community-driven DeFi protocol combining lending markets with scalable governance. Its hybrid model balances security (via Governors) and flexibility (rapid asset onboarding). As decentralized finance evolves, will Strike’s delegated governance structure maintain efficiency against rising competition?